Filing Information: April 2012, IDC #234489, Volume: 1, Tab: Markets

Storage Solutions: Disk-Based Data Protection and Recovery: Market Analysis

M A R K E T AN A L Y S I S

W o r l d w i d e P u r p o s e - B u i l t B a c k u p Ap p l i a n c e 2 0 1 2 –2 0 1 6 F o r e c a s t a n d 2 0 1 1 V e n d o r S h a r e s

Robert Amatruda

I D C O P I N I O N

The worldwide purpose-built backup appliance (PBBA) market experienced

exceptional growth in 2011. The worldwide PBBA revenue totaled $2.4 billion in 2011,

posting an 43.4% increase over the prior year. The exceptional growth is due to

increased use and customer adoption of PBBA systems for backup, recovery, and

storage optimization with the use of data deduplication. We believe the customer

drivers for increased investment in PBBA solutions result from the need to improve

backup window time, to provide faster restore and recovery times, and to enable

seamless integration with existing backup applications. As a result, customers

continue to aggressively move away from tape-based backup and recovery

processes. This trend will continue for the foreseeable future as customers take

advantage of PBBA's rich feature sets, particularly for virtual server protection, rapid

recovery, and data deduplication. However, tape will still be used and deployed

alongside PBBA systems in customer environments — primarily mainframe

environments — and as an archive platform for open system customers. We continue

to be upbeat on the growth potential of PBBA systems through the forecast period.

Key findings for 2011 in the worldwide PBBA market include:

At the close of 2011, EMC remained the revenue share leader, commanding

65.5% of the total $2.4 billion PBBA solutions market. IBM and HP followed, with

15.3% and 4.1% revenue share, respectively. In addition, EMC held the top

share position in terms of total worldwide PBBA capacity, with 64.7% of the raw

terabytes shipped. IBM held 9.2% of the total worldwide PBBA capacity shipped,

while HP held 8.9% for the same period.

We expect the total worldwide PBBA revenue will grow robustly with a compound

annual growth rate (CAGR) of 19.4%, totaling nearly $5.9 billion by the close of

2016 — driven by customers' need to augment their existing data protection and

recovery infrastructure or to modernize their environments taking advantage of

data deduplication.

Furthermore, we expect rapid growth in capacity shipped for PBBA solutions as

customers continue to curb investments in their tape infrastructure for rapid

recovery. We anticipate total capacity shipped will increase at a 56.2% CAGR,

totaling nearly 8.6EB at the close of 2016.

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©2012 IDC #234489 1

I N T H I S S T U D Y

In this IDC study, market share positions for revenue and raw capacity are reported

for 11 named PBBA vendors for the full year 2011. In addition, this study provides the

market size and five-year forecast for the worldwide PBBA market as part of IDC's

Storage Solutions coverage. The five-year forecasts include total factory revenue and

raw capacity in terabytes through 2016. Data reported for 2010 and 2011 are based

on actual results. The worldwide PBBA market sizing and forecasts cover aggregate

results for both open system and mainframe-attached products.

M e t h o d o l o g y

IDC gathered primary data for this study from telephone and personal interviews with

vendors offering PBBA solutions. For the most part, IDC assumed vendor-supplied

data to be accurate. IDC made adjustments on a case-by-case basis to reflect our

judgment and market knowledge. Data was consistently cross-checked with available

industry sources. When detailed information was unavailable, IDC interpolated known

data from all available sources.

IDC defines a purpose-built backup appliance as a standalone disk-based solution

that utilizes software, disk arrays, server engine(s), or nodes that are used for a target

for backup data — and specifically data coming from a backup application (e.g.,

NetWorker, NetBackup, TSM, and Backup Exec) — or can be tightly integrated with

the backup software to catalog, index, schedule, and perform data movement. The

PBBA products are deployed in standalone configurations or as gateways. PBBA

solutions deployed in a gateway configuration connect to and store backup data on

general-purpose storage. Here, the gateway device serves as the component that is

purpose built solely for backup and does not support any other workload or

application. Regardless of packaging (as an appliance or gateway), PBBAs can have

multiple interfaces or protocols. Also, PBBAs often can provide and receive

replication to or from remote sites and a secondary PBBA for the purpose of disaster

recovery.

IDC has defined two PBBA product categories, integrated systems and target

systems:

PBBA systems used in conjunction with third-party backup software and

designed to integrate in heterogeneous environments are called PBBA backup

targets.

PBBA systems that are tightly integrated with backup software are called PBBA

integrated systems. The PBBA integrated systems can have master or media

servers built integrated into the system to orchestrate the backup and movement

of data to other systems or removable media such as tape.

However, the five-year worldwide PBBA forecast presented in this analysis is an

aggregate forecast for PBBA target and integrated systems. All forecast revenue is

reported in terms of factory value, consistent with other IDC hardware and software

analyses. IDC includes software revenue for those software products with an

2 #234489 ©2012 IDC

associated and separately purchasable SKU. IDC does not attempt to derive or make

a judgment call on the value, and thus revenue, associated with software, which is

embedded with and included in the sale of a hardware solution.

Note: All numbers in this document may not be exact due to rounding.

S I T U AT I O N O V E R V I E W

Customer strategies for data protection and recovery continue to be dictated by

aggressive SLAs, rapid recovery, and ease of integration in existing environments. As

a result, firms are embracing more disk-based data protection technologies, including

PBBA systems to protect and recover data and applications. These appliances

include features such as data deduplication, compression, encryption, and remote

replication and present a range of interfaces to the backup server (i.e., NFS, CIFS,

VTL, OST).

The worldwide PBBA market comprises a wide array of products that are designed as

backup targets and provide rapid recovery. PBBA solutions are designed for capacity

optimization utilizing data deduplication that enables customers to manage their ever-

growing volumes of backup data. We believe customers are gravitating toward

deployment of PBBA solutions as a way to control their data protection capital and

operational expenditures. Also, PBBA solutions provide customers a way to extend

their existing investments in data protection hardware and software without having to

change any existing process. In many cases, a firm's investments in data protection

software and hardware solutions are very costly and are not subject to rapid

replacement cycles. Thus PBBAs allow customers to have a great deal of

coexistence with regard to software and hardware.

The worldwide PBBA market covers products designed for open system and

mainframe environments. The open system PBBA systems are, in many cases,

designed to supplant tape, while the mainframe PBBA systems are deployed with a

large physical tape component. This is true for IBM and Oracle. However, EMC, IBM,

and Oracle have brought to market tapeless versions of the mainframe PBBA

systems. The worldwide PBBA analysis only reports the disk cache and server engine

components of the mainframe market. If physical tape was included, the capacity and

market value for mainframe PBBA systems' overall revenue and capacity would be

larger. Physical tape is excluded in the worldwide PBBA analysis to normalize

comparisons for open and mainframe systems.

In terms of vendor performance in 2011, EMC continued to command a sizable lead

in the aggregate worldwide PBBA market, holding 65.5% of the total $2.4 billion in

revenue and 64.7% of the total 927,474TB of raw capacity. EMC continues to invest

in its Data Domain offerings with renewed emphasis on the low end, with its entry

DD160 being sold exclusively through channel partners. Also, EMC has been

expanding its Avamar offerings for larger, more scalable backup and recovery

environments, especially for virtual server applications as well as NAS, remote office,

desktop, and laptop environments. In addition, EMC has been enhancing its EMC

Disk Library for mainframe offering for mainframe tape replacement. EMC's solution

focus extends beyond the appliance form factor with its NetWorker data protection

©2012 IDC #234489 3

software and its Data Protection Advisor management software, which provides

automated analysis and alerting across backup, replication, and virtual environments.

Meanwhile, IBM, holding 15.3% of the total PBBA revenue and 9.2% of overall raw

capacity shipped, continues to be dominant in the mainframe PBBA market. IBM has

had very good success with its mainframe offerings such as IBM TS7700

Virtualization Engine. The IBM TS7700 Virtualization Engines are designed to support

and optimize physical tape infrastructure. However, IBM does have an all-disk

implementation designed for multisite replication, with data being migrated to physical

tape for archive and disaster recovery. The reported revenue for IBM does not include

the physical tape deployment alongside these systems. This was done to normalize

the reported revenue to include only the disk portion or cache portion of the system.

IBM offers a rich set of open PBBA products with its ProtecTIER systems. IBM

continues to ramp its ProtecTIER products to address the disk-based data protection

needs of its customers. IBM has had great success with its TS7650G ProtecTIER

Deduplication Gateway. This is a highly scalable PBBA gateway that supports third-

party storage. Furthermore, IBM has been pursuing the open system PBBA market

with smaller, rack-based, preconfigured ProtecTIER appliances designed for small

enterprise customers. All ProtecTIER systems have storage optimization its patented

HyperFactor data deduplication technology.

HP, holding 4.1% of the total worldwide PBBA share and accounting for 8.9% of the

total worldwide capacity share, continues to move its portfolio upmarket. HP's recently

introduced B6200 storage system is the company's latest entrée in the PBBA market.

The B6200 system augments HP's PBBA offerings for enterprise customers. The

B6200 represents an entirely new architecture for HP. HP is focused on a high-

density, scale-out, modular architecture with built-in high availability called Autonomic

Failover. HP is offering its StoreOnce data deduplication engine as its storage

optimization tool embedded in the B6200. HP utilizes the StoreOnce data

deduplication engine in its entry and midmarket offerings — the D2D2500 and

D2D4000. These systems are offered in rackmountable appliance-based form factors.

All HP D2D systems integrate existing IT infrastructure and processes providing both

virtual tape library and NAS protocols. Furthermore, the StoreOnce data deduplication

algorithm is now included as part of HP's Data Protector offering, providing a single

deduplication algorithm across the enterprise without the need for rehydration of data.

The HP D2D StoreOnce systems with HP's StoreOnce deduplication engine provide

disk-based data protection for datacenters and remote offices. This allows customers

to automate and consolidate the backup of multiple servers onto a single,

rackmountable appliance.

Symantec, holding 3.5% of the total worldwide PBBA revenue and 3.7% of total raw

capacity, continues to use its systems to extend its backup framework to existing and

new customers looking to cost-effectively protect their data. Symantec offers

appliances for enterprise customers, with NetBackup (5200 and 5000 series), and

SMBs, with Backup Exec (3600). The NetBackup 5200 and Backup Exec 3600 series

contain the core backup software, server, and storage to function as all-in-one

appliances and as building blocks to scale out NetBackup architecture. The

appliances support the latest software versions typically three to four months after

software availability. Symantec appliances share important common capabilities such

as end-to-end deduplication (source, target inline, or postprocess), Symantec V-Ray,

4 #234489 ©2012 IDC

tape support, and replication for disaster recovery. Larger enterprise customers can

scale out with multiple NetBackup 5220s and flexible connectivity options providing a

scalable way to modernize and extend their protection infrastructure. In addition, the

NetBackup AIR capability provides recovery of data replicated to an alternate site or

an appliance. The NetBackup 5220 appliance is tuned for virtual backup/recovery,

with tight integration for VMware, through VADP, allowing for "proxyless" backup. The

Symantec appliances also support Symantec's V-Ray technology, allowing customers

to gain greater management and visibility into their protection environment. Also, the

NetBackup 5000 series provides a scale-out, global deduplication pool for

NetBackup.

Quantum, holding 2.6% of the total worldwide PBBA revenue and 4.5% of total raw

capacity, offers one of the most extensive lineups of systems in the marketplace.

Quantum offers cost-effective, rack-based appliances for small to medium-sized

businesses or branch offices with integrated capacity-on-demand deduplication, with

its DXi4000 series systems. All software features such as replication and support for

the Symantec OpenStorage API (OST) are included in the base price. Quantum also

offers an extensive line of PBBA systems for midmarket customers — its DXi6000

deduplication appliances. The DXi6000 appliances range in size from 8TB to 80TB of

usable capacity offering inline data deduplication. These systems offer automated

disaster recovery and include all software licenses in the initial purchase price. The

DXi6000 systems present with a NAS (CIFS, NFS) interface and offer VM backup

support for both traditional and agentless backup software. In addition, the DXi6000

series integrates smoothly with all prevailing backup applications. Quantum's

enterprise offering is the DXi8500, with 40–320TB usable capacity. The DXi8500

system offers a broad array of protocol support including deduplication-enabled VTL,

CIFS, NFS, and OST, as well as native-mode (non-deduplicating) VTL and NAS

shares. In addition, protocols can be supported simultaneously in the same system

for greater flexibility in heterogeneous environments. A standard feature on DXi8500

and DXi6700 appliances is DXi Accent software for hybrid-mode deduplication, which

increases backup throughput over low-bandwidth networks by moving part of the

deduplication process to the backup server. Also, the DXi8500 features an integrated

path to tape for both VTL and OST presentations, allowing a direct link to physical

tape libraries. All DXi-Series appliances work with Quantum's vmPRO software, which

is a VM data protection solution enabling more efficient backup, restoration, and

disaster recovery in virtual environments. In addition, Quantum is offering a virtual

appliance called the DXi V1000. The DXi V1000 provides backup and disaster

recovery for distributed sites, small businesses, and cloud deployments.

Oracle and Fujitsu, holding 1.9% and 1.5% of the total worldwide PBBA revenue

share, respectively are focused on large-scale customers and deployments. Also,

Oracle and Fujitsu hold 0.8% and 1.2% of the total worldwide PBBA raw capacity

shipped in 2011, respectively. Both companies have a long legacy in the data

protection and recovery market. Oracle's StorageTek Virtual Storage Manager (VSM)

subsystem is designed for mainframe customers and environments. The VSM is

designed to be deployed with an all-disk library as a second tier of storage called

Virtual Library Extension (VLE). The VLE provides flexibility to keep a larger amount

of active data within disk for longer periods of time. This augments capacity for

physical tape storage. The revenue associated with the physical tape portion of the

VSM is not represented in this analysis. Fujitsu offers its ETERNUS CS800

©2012 IDC #234489 5

deduplication appliance, which offers up to 160TB of usable capacity and can present

with NAS or VTL protocols. Fujitsu also offers its ETERNUS CS High End data

protection appliance for consolidation of backup environments. The ETERNUS CS

High End can be deployed in grid architecture for increased scalability. The

ETERNUS CS High End supports SAN and Ethernet connectivity as well as VTL,

NAS, and WORM for backup and archiving.

Sepaton, holding 1.4% of the total worldwide PBBA revenue share and 0.6% of the

total capacity shipped, is focused on large enterprise customers with massive

amounts of data and expansive data growth. Sepaton utilizes its patented and

trademarked DeltaScale architecture to deliver its grid-based S2100 system offering

up to 1.6PB of physical usable capacity. Sepaton's grid architecture allows customers

the ability to scale performance and capacity independently, delivering superior TCO.

The Sepaton S2100 system scales out with its processing nodes (SEPATON

replication engine [SRE]) to provide up to 43.2TB/hour of throughput. Capacity is

added with precabled cabinets for nondisruptive expansion. The S2100 system

supports Symantec NetBackup OpenStorage (OST) on 10 Gigabit Ethernet

concurrently with Fibre Channel tape emulation. In addition, the S2100 system

provides multitenancy capabilities with storage pooling to create discrete storage

environments or pools within a single appliance. Thus an organization can assign

each pool by client, disk type, deduplication configuration, replication priority, backup

policy, and backup application. Sepaton continues to refine and enhance its PBBA

systems, most recently supporting Symantec's NetBackup OpenStorage Auto Image

Replication (A.I.R.) and Optimized Synthetic backup. These features make disk-

based backup and disaster recovery more efficient for large data-intensive

enterprises.

ExaGrid, holding 1.3% of the total worldwide PBBA revenue share and 2.3% of the

total capacity shipped, offers eight disk-based backup appliance models that can be

combined into a GRID configuration of up to 320TB raw capacity and allow full

backups of up to 130TB. ExaGrid offers a very competitive set of PBBA systems that

utilize postprocess deduplication, coupled with disk caching and grid scalability, to

achieve aggressive customer SLAs for backup and recovery. ExaGrid's highly

scalable GRID architecture for disk backup allows for cost-effective modular

expansion by adding full servers including CPU, memory, disk, and I/O to maintain a

consistently short backup window as data grows and avoid costly forklift upgrades

and product obsolescence. ExaGrid's disk backup systems support all prevailing

application software for data protection and recovery, including both physical and

virtual environments. ExaGrid is singularly focused on disk-based data protection and

disaster recovery solutions and has offices and distribution worldwide. Currently,

ExaGrid has more than 4,200 systems installed at more than 1,300 customers.

FalconStor holds 1.1% of total PBBA revenue and 1.8% of total capacity shipped

worldwide. FalconStor offers a wide array of data protection and recovery products

such as Continuous Data Protector (CDP), Virtual Tape Library (VTL), Network

Storage Server (NSS), and File-interface Deduplication System (FDS). FalconStor's

solutions are primarily oriented to Fortune 1000 companies in industries such as

financial services, telecommunications, aerospace, manufacturing, law, energy

production, government, healthcare, and higher education. The FalconStor products

covered in this analysis are the VTL and CDP solutions. FalconStor VTL can support

6 #234489 ©2012 IDC

small and ROBO environments through storage appliances and small-footprint virtual

appliances and also is available as a high-availability (HA) clustered solution for the

enterprise. FalconStor VTL is delivered in a variety of form factors, including as

software only, fully configured appliance, or virtual machine. FalconStor continues to

enhance its VTL offerings with the 7.5 release. FalconStor VTL 7.5 provides

customers with flexible data deduplication options such as inline, postprocess, and

concurrent. Other improvements include greater scalability with enhanced OST

support, flexible repositories and cluster expansion, more efficient replication, and

AES encryption. FalconStor's CDP system is a disk-based continuous data protection

solution that provides comprehensive backup, remote replication, and rapid disaster

recovery. These features enable customers to have greater availability of their data.

The CDP appliance is interoperable with Unix, Linux, and Microsoft Windows

environments and protects application-specific data for Microsoft, Oracle, SAP, and

other business applications.

Dell, holding 1.0% of the total worldwide PBBA revenue and 1.5% of the total capacity

shipped, has been investing in its disk-based data protection and recovery portfolio in

the past year, most recently with its AppAssure acquisition. In late 2011, Dell

announced its DR4000 disk-based backup, data protection, and recovery solution

appliance. The DR4000 is a turnkey target PBBA system that provides deduplication,

compression, and replication with RAID 6 protected arrays. The DR4000 supports

NFS, CIFS, and OST protocols and is qualified with Commvault Simpana, Symantec

NetBackup and Backup Exec, and AppAssure software. It is packaged in a 2U form

factor available in 2.7TB, 5.4TB, and 9TB capacities. The DR4000, which is focused

on small and midmarket customers, is delivered with all-inclusive licensing that

includes OST and replication in the base price. However, the Dell PowerVault DL

Backup to Disk Appliance is catered to midsize to large enterprises looking for a

turnkey data protection solution, but it is also ideal for SMBs. Dell offers its

PowerVault DL Backup to Disk Appliance bundled with Backup Exec 2010 R2 or

Simpana, which is ideal for customers desiring an all-in-one appliance. Both versions

of DL provide data deduplication, replication, remote monitoring, and archiving. The

PowerVault DL Backup to Disk Appliance supports data movement to physical tape.

Tables 1 and 2 provide worldwide revenue and capacity shipped in 2011.

©2012 IDC #234489 7

T A B L E 1

W o r l dw i d e Pu r po s e - B u i l t B a c k u p A p p l i a n c e R e v e n u e b y V e n do r , 2 0 1 1

Revenue ($M) Share (%)

EMC 1,588.4 65.5

IBM 370.1 15.3

HP 100.6 4.1

Symantec 84.1 3.5

Quantum 63.8 2.6

Oracle 45.5 1.9

Fujitsu 36.0 1.5

Sepaton 35.0 1.4

ExaGrid 31.4 1.3

FalconStor 27.7 1.1

Dell 24.5 1.0

Other 16.6 0.7

Total 2,423.6 100.0

Note: Revenue share includes open and mainframe PBBA systems.

Source: IDC, 2012

8 #234489 ©2012 IDC

T A B L E 2

W o r l dw i d e Pu r po s e - B u i l t B a c k u p A p p l i a n c e C a p a c i t y b y V en do r , 2 0 1 1

Capacity Shipped (TB) Share (%)

EMC 599,678 64.7

IBM 85,453 9.2

HP 82,202 8.9

Quantum 41,523 4.5

Symantec 34,587 3.7

ExaGrid 21,636 2.3

FalconStor 16,537 1.8

Dell 14,203 1.5

Fujitsu 11,571 1.2

Oracle 7,534 0.8

Sepaton 5,443 0.6

Other 7,110 0.8

Total 927,474 100.0

Note: Capacity share includes open and mainframe PBBA systems.

Source: IDC, 2012

D a t a D e d u p l i c a t i o n a n d t h e I m p a c t o n

D a t a P r o t e c t i o n

The demand for data deduplication, in both midsize and enterprise environments, is

escalating as firms look for ways to keep pace with the near doubling of storage

growth annually. This growth is fueled by new applications, the proliferation of

virtualization, the creation of electronic document stores and document sharing, use

of Web 2.0 technologies, and the retention of digital records. With constrained IT

budgets, the need to curb data growth is heightened as firms look to reduce capital

and operating costs. From a physical perspective, many datacenter managers are

also dealing with limited infrastructure in terms of power, cooling, and floor space.

Deduplication is a technology that not only aids in accelerating storage efficiency by

reducing cost but also alleviates physically constrained datacenters.

©2012 IDC #234489 9

Deduplication also addresses challenges associated with management, backup, and

network inefficiency. Firms are deploying data deduplication in a number of places in

the infrastructure stack to address practical, real-world challenges. Deduplication is a

feature that is increasingly being embedded in backup applications, disk storage

systems, file systems, and the like. While today deduplication is a feature closely tied

to data protection, over time it is likely that all storage systems will have some form of

storage optimization provided natively within its architecture. Nonetheless,

deduplication has been a disruptive technology making the use of disk for data

protection more economically feasible than ever before.

V i r t u a l i z a t i o n a n d t h e I m p a c t o n D a t a a n d

S y s t e m - L e v e l P r o t e c t i o n a n d R e c o v e r y

The proliferation of virtualization has had an impact on how data and systems are

protected, backed up, and recovered. Because virtualization has moved well beyond

test and development and is mainly used for production applications, the importance

of fast, reliable, and efficient backup and recovery has increased in priority. The use

of virtualization in business-critical workloads such as ERP and CRM has brought to

the surface the need for more richly configured systems and streamlined protection

and recovery processes. The adoption of virtualization on server infrastructure has

raised several challenges, including network and I/O bottlenecks.

As firms virtualize either their server or their PC environment, they are often re-

architecting their backup products and approaches. As a result, changes to existing

data protection infrastructure frequently comes on the heels of expanded virtualization

efforts. Moreover, there are different methodologies for virtual machine protection. As

firms move increasingly critical workloads to virtual machines, they seek to shift to a

networked storage infrastructure to benefit from improved service levels around

availability, workload balancing, recovery, and the like. The shift to shared storage

often brings about a change in backup processes — the use of new protection and

recovery methodologies enables avoidance of tape management all together.

T a p e M e d i a , A u t o m a t i o n , a n d D r i v e S p e n d i n g

The increased use and deployment of disk-based data protection for backup and

recovery has arrested the overall spending on tape-based infrastructure in the past

several years. The increased popularity and use of general-purpose disk arrays,

PBBA systems, and VTLs has provided many customers the ability to have rapid

recovery of data and applications. In the past, physical tape systems were the only

cost-effective manner to achieve timely recovery. However, disk-based data

protection solutions, coupled with data deduplication and replication, now fulfill many

of the customer requirements. We do see more customer investment in physical tape

infrastructure in the future, especially for deep archive. We see more customer

investment in automated tape systems that can support multiple tape drives and

hundreds of tape cartridges used as a shared resource, thus consolidating tape

systems used for separate applications.

10 #234489 ©2012 IDC

F U T U R E O U T L O O K

F o r e c a s t a n d A s s u m p t i o n s

We are very bullish on the long-term outlook for the worldwide PBBA market. At the

close of 2011, the aggregate open system and mainframe worldwide PBBA market

increased by 43.4%, totaling over $2.4 billion. In addition, raw capacity increased by

99.4%, totaling 927,474TB. All PBBA market participants benefitted from overall

market growth despite the stability in the share positions. We expect total worldwide

PBBA revenue will increase by a 19.4% CAGR through 2016, totaling nearly $5.9

billion (see Table 3). We expect total worldwide PBBA capacity will increase by a

56.2% CAGR, totaling nearly 8.6EB (see Table 4). The top 3 macroeconomic

assumptions are outlined in Table 5, and Table 6 spells out the accelerators and

inhibitors for the worldwide PBBA market.

T A B L E 3

W o r l dw i d e Pu r po s e - B u i l t B a c k u p A p p l i a n c e R e v e n u e , 2 0 1 0 –2 0 1 6

2010 2011 2012 2013 2014 2015 2016

2011–2016

CAGR (%)

Revenue ($M) 1,689.6 2,423.6 3,168.6 3,899.7 4,603.1 5,265.0 5,881.1 19.4

Growth (%) NA 43.4 30.7 23.1 18.0 14.4 11.7

Note: See Table 5 for top 3 assumptions and Table 6 for key forecast assumptions.

Source: IDC, 2012

T A B L E 4

W o r l dw i d e Pu r po s e - B u i l t B a c k u p A p p l i a n c e C a p a c i t y S h i p p e d , 2 0 1 0 – 2 0 1 6

2010 2011 2012 2013 2014 2015 2016

2011–2016

CAGR (%)

Capacity

shipped (TB)

465,215 927,474 1,649,316 2,704,620 4,171,689 6,120,485 8,616,869 56.2

Growth (%) NA 99.4 77.8 64.0 54.2 46.7 40.8

Note: See Table 5 for top 3 assumptions and Table 6 for key forecast assumptions.

Source: IDC, 2012

©2012 IDC #234489 11

T A B L E 5

T o p 3 A s s u m p t i o n s f o r t h e W o r l dw i d e Pu r po s e - B u i l t B a c ku p A p p l i a n c e M a r k e t ,

2 0 1 2– 2 0 1 6

Market Force IDC Assumption Significance

Changes to This

Assumption That

Could Affect Current

Forecast Comments

Economy GDP growth will

remain broadly stable

in 2012, with no

double-dip recession

in spite of some

downside risk factors.

Worldwide GDP

growth will drop to

around 3% (from 4%

in 2010), primarily

because the surging

rebound in emerging

markets will plateau

into a more

sustainable trend. The

U.S. economy will

perform strongly, with

GDP growth

accelerating slightly to

more than 3%.

Assuming no return of

the sovereign debt

crisis, Western Europe

will also see continued

growth in 2012 (but

slightly weaker than

2010 due partly to

government austerity

programs). Japan will

struggle to maintain

momentum, with much

weaker growth than

last year, but other

economies in

Asia/Pacific will

continue to perform

strongly.

A down economy

affects business and

consumer confidence,

availability of credit

and private

investment, and

internal funding.

Another significant

national economic

recession could

adversely impact

growth in this market.

Currently, there is no

indication of a double-

dip national economic

recession.

12 #234489 ©2012 IDC

T A B L E 5

T o p 3 A s s u m p t i o n s f o r t h e W o r l dw i d e Pu r po s e - B u i l t B a c ku p A p p l i a n c e M a r k e t ,

2 0 1 2– 2 0 1 6

Market Force IDC Assumption Significance

Changes to This

Assumption That

Could Affect Current

Forecast Comments

Fiscal stimulus

packages

Stimulus spending

probably helped many

economies avoid a

longer, deeper

recession and drove

much of the

momentum in 2011.

The positive benefits

of previous stimulus

measures will

gradually wane in the

next 12 months, but

some trickle-through

effects will persist.

Tighter fiscal policy in

most economies will

likely have a

contractionary effect

on private demand

and economic activity

in the short term.

The stimulus

packages and bailouts

seem to have averted

disaster, but the

positive benefits will

wane in 2012. We

believe the GDP

forecasts have

accounted for these

government actions.

Fiscal stimulus could

help propel spending

growth of the overall IT

market.

Fiscal stimulus may

not be a significant

driver of PBBA market

growth.

Oil prices Oil prices will rise in

2012, as a result of

rising demand as the

global economy picks

up. There is some

concern that this may

have an adverse

impact on economic

growth in the short

term, combined with

other inflationary

forces. Our baseline

assumption is that

prices will remain

within a range that

doesn't derail the

economic recovery.

While lower oil prices

help spur lagging

consumer spending,

higher prices signal

that demand is rising.

Oil prices will not have

a large impact on the

PBBA forecast.

Oil prices will not have

a large impact on

PBBA market

spending.

Source: IDC, 2012

©2012 IDC #234489 13

T A B L E 6

K e y F o r e c a s t A s s u m p t i o n s f o r t h e W o r l dw i d e P u r po s e - B u i l t B a c ku p A p p l i a n c e

M a r k e t , 2 0 1 2 –2 0 1 6

Market Force IDC Assumption Impact

Accelerator/

Inhibitor/

Neutral

Certainty of

Assumption

Macroeconomics

Economy GDP growth will remain broadly

stable in 2012, with no double-

dip recession in spite of some

downside risk factors.

Worldwide GDP growth will

drop to around 3% (from 4% in

2010), primarily because the

surging rebound in emerging

markets will plateau into a more

sustainable trend. The U.S.

economy will perform strongly,

with GDP growth accelerating

slightly to more than 3%.

Assuming no return of the

sovereign debt crisis, Western

Europe will also see continued

growth in 2012 (but slightly

weaker than 2010 due partly to

government austerity

programs). Japan will struggle

to maintain momentum, with

much weaker growth than last

year, but other economies in

Asia/Pacific will continue to

perform strongly.

High. A down economy affects

business and consumer

confidence, availability of credit

and private investment, and

internal funding.

Fiscal stimulus

packages

Stimulus spending probably

helped many economies avoid

a longer, deeper recession and

drove much of the momentum

in 2011. The positive benefits of

previous stimulus measures will

gradually wane in the next 12

months, but some trickle-

through effects will persist.

Tighter fiscal policy in most

economies will likely have a

contractionary effect on private

demand and economic activity

in the short term.

Moderate. The stimulus

packages and bailouts seem to

have averted disaster, but the

positive benefits will wane in

2012. We believe the GDP

forecasts have accounted for

these government actions.

14 #234489 ©2012 IDC

T A B L E 6

K e y F o r e c a s t A s s u m p t i o n s f o r t h e W o r l dw i d e P u r po s e - B u i l t B a c ku p A p p l i a n c e

M a r k e t , 2 0 1 2 –2 0 1 6

Market Force IDC Assumption Impact

Accelerator/

Inhibitor/

Neutral

Certainty of

Assumption

Oil prices Oil prices will rise in 2012, as a

result of rising demand as the

global economy picks up. There

is some concern that this may

have an adverse impact on

economic growth in the short

term, combined with other

inflationary forces. Our baseline

assumption is that prices will

remain within a range that

doesn't derail the economic

recovery.

Low. While lower oil prices help

spur lagging consumer

spending, higher prices signal

that demand is rising.

Technology/

industry

developments

Server

consolidation

Concerns about the

manageability and efficiency of

information in distributed file

servers will force many

companies to undertake

consolidation programs for file

assets.

High. Consolidation will drive

demand for entry NAS and

clustered NAS

appliance/gateway solutions as

well as spur demand for more

intelligent data management

capabilities that scale across

multiple FBS systems.

Massive scale-out

storage

Massive scale-out storage

systems will begin to have a

more visible effect on the

market in 2012 as many

content depots and cloud

service providers begin to build

out large content- and

compute-centric environments.

The impact of this new model

on sales of more traditional

environments will be significant

in the cloud service market than

in the traditional enterprise

market.

Moderate. Massive scale

storage systems will account

for a significant amount of

storage capacity, but their

extremely low dollar-per-

gigabyte levels will inhibit

hardware revenue growth.

©2012 IDC #234489 15

T A B L E 6

K e y F o r e c a s t A s s u m p t i o n s f o r t h e W o r l dw i d e P u r po s e - B u i l t B a c ku p A p p l i a n c e

M a r k e t , 2 0 1 2 –2 0 1 6

Market Force IDC Assumption Impact

Accelerator/

Inhibitor/

Neutral

Certainty of

Assumption

Storage in the

cloud

Explosive growth of information

in the cloud (and outside the

cloud) will, more than in any

other infrastructure category,

drive demand for storage

systems, with a lesser impact

on software and services.

Moderate. Cloud-based

storage is still an evolving

architecture. While it will

generate significant interest

from certain types of

organizations (e.g., content

delivery network providers),

overall, it will cause a shift of

end-user spending from

traditional on-premise storage

implementations to cloud

services. There will be a bigger

impact on certain categories of

storage systems, specifically in

file servers and clustered NAS.

Convergence Convergence is a complex

phenomenon working at many

levels — in the case of storage,

networking and processing in

the datacenter, this is driven by

organizations' desire to deploy

scalable virtualized

datacenters. One option for

enabling converged IT

infrastructure is greater use of

FBS solutions for image loading

and data management. This

development, in conjunction

with 10 GbE deployments, may

drive accelerated demand for

NAS appliances and gateways.

High. Convergence will drive

new competitive dynamics,

offer new applications and

functions to customers, and

strain the legal and regulatory

systems. It will also drive

increased ICT spending.

16 #234489 ©2012 IDC

T A B L E 6

K e y F o r e c a s t A s s u m p t i o n s f o r t h e W o r l dw i d e P u r po s e - B u i l t B a c ku p A p p l i a n c e

M a r k e t , 2 0 1 2 –2 0 1 6

Market Force IDC Assumption Impact

Accelerator/

Inhibitor/

Neutral

Certainty of

Assumption

Long-term

archiving and data

management

The optimization of storage

infrastructure and storage/data

management services in long

term and active archive

environments will see

opportunity.

Moderate. The strain on IT

resources to manage growing

volumes of file data in archives

will necessitate increased

demand for FBS storage

solutions designed for

maximum efficiency, minimal

storage management,

advanced indexing/metadata

analytic capabilities and may

include requirement of support

for a tape tier and a cloud tier.

Legend: very low, low, moderate, high, very high

Note: Economic, political, technology, and industry assumptions for the entire storage market can be found in Worldwide

Enterprise Storage Systems 2010–2014 Forecast Update: Better Expectations on 2010 Growth, No Changes to Long-Term

Outlook (IDC #224618, August 2010).

Source: IDC, 2012

M a r k e t C o n t e x t

IDC published a forecast update in December 2010 based on two quarters of actual

data (see Worldwide Purpose-Built Backup Appliance 2011–2015 Forecast Update:

Explosive Growth in 2011, IDC #232070, December 2011). This was an update from

an initial five-year forecast published for the worldwide PBBA market in Worldwide

Purpose-Built Backup Appliance 2011–2015 Forecast and 2010 Vendor Shares (IDC

#228091, May 2011).

Table 7 and Figure 1 provide a comparison of the forecast update published in

December 2011 with the current forecast in terms of worldwide annual revenue and

growth rates. The slight decline in the 2011 actual versus the 2011 estimated growth

is a result of overcounting software revenue sold with PBBA systems and reflects

more aggressive discounting of systems sold. The actual revenue for the worldwide

PBBA market totaled slightly over $2.4 billion rather than the estimated $2.8 billion in

the forecast update in December 2011.

©2012 IDC #234489 17

T A B L E 7

W o r l dw i d e Pu r po s e - B u i l t B a c k u p A p p l i a n c e R e v e n u e , 2 0 1 0 –2 0 1 6 : C o m p a r i s o n

o f D e c em b e r 2 0 1 1 a n d A p r i l 2 0 1 2 F o r e c a s t s ( $ M )

2010 2011 2012 2013 2014 2015 2016

2011–2016

CAGR (%)

April 2012

forecast

1,689.6 2,423.6 3,168.6 3,899.7 4,603.1 5,265.0 5,881.1 19.4

Growth (%) NA 43.4 30.7 23.1 18.0 14.4 11.7

December

2011 forecast

1,690.4 2,797.8 3,822.4 4,564.3 5,026.2 5,290.8 NA NA

Growth (%) NA 65.5 36.6 19.4 10.1 5.3 NA

Notes:

See Worldwide Purpose-Built Backup Appliance 2011–2015 Forecast Update: Explosive Growth in 2011 (IDC #232070,

December 2011) for prior forecast.

Historical market values presented here are as published in prior IDC documents based on the market taxonomies and

current U.S. dollar exchange rates existing at the time the data was originally published. For more details, see the

Methodology in the Learn More section.

Source: IDC, 2012

F I G U R E 1

W o r l dw i d e Pu r po s e - B u i l t B a c k u p A p p l i a n c e R e v e n u e , 2 0 1 0 –2 0 1 6 :

C o m p a r i s o n o f D e c em be r 2 0 1 1 an d A p r i l 2 0 1 2 F o r e c a s t s

Source: IDC, 2012

18 #234489 ©2012 IDC

E S S E N T I AL G U I D A N C E

We expect vigorous customer adoption of PBBA solutions for the foreseeable future.

From a vendor perspective, IDC believes that it's sound and prudent advice to do the

following:

Demonstrate the utility and value of using PBBA solutions in concert with existing

data protection infrastructure — software and hardware.

Provide nondisruptive integration of PBBA solutions to customers' existing data

protection and disaster recovery frameworks so they need not change any

procedures and policies.

Support seamless data movement from PBBA systems to physical tape to

support archive and disaster recovery.

Support industry-standard interfaces, APIs, and application software to ease

deployment.

Add features that optimize storage efficiency and security and provide a more

cohesive DR approach such as data deduplication, encryption, or replication.

Support virtualized server environments enabling customers to use the same

tools to safeguard both physical and virtual infrastructure.

L E AR N M O R E

R e l a t e d R e s e a r c h

IDC's Worldwide Purpose-Built Backup Appliance and Tracker Taxonomy (IDC

#233040, February 2012)

Worldwide Purpose-Built Backup Appliance 2011–2015 Forecast Update:

Explosive Growth in 2011 (IDC #232070, December 2011)

Worldwide Purpose-Built Backup Appliance 2011–2015 Forecast and 2010

Vendor Shares (IDC #228091, May 2011)

M e t h o d o l o g y

Historical Market Values and Exchange Rates

Historical market values presented here are as published in prior IDC documents

based on the market taxonomies and current U.S. dollar exchange rates existing at

the time the data was originally published. For markets other than the United States,

these as-published values are therefore based on a different exchange rate each

year.

Please refer to IDC's regional research studies containing historical forecasts for

multiple countries for more accurate regional growth in local currencies. Note that this

©2012 IDC #234489 19

discussion applies only to historical values prior to 2011. 2011 and all future years are

forecast at a constant exchange rate.

S y n o p s i s

This IDC study presents market share positions for revenue and raw capacity for 11

named purpose-built backup appliance (PBBA) vendors for the full year 2011. In

addition, this study provides the market size and five-year forecast for the worldwide

PBBA market as part of IDC's Storage Solutions coverage.

"The worldwide purpose-built backup appliance market experienced exceptional

growth in 2011. The worldwide PBBA revenue totaled $2.4 billion in 2011, posting an

43.4% increase over the prior year. The exceptional growth is due to increased use

and customer adoption of PBBA systems for backup, recovery, and storage

optimization with the use of data deduplication. We believe the customer drivers for

increased investment in PBBA solutions result from the need to improve backup

window time, to provide faster restore and recovery times, and to enable seamless

integration with existing backup applications. As a result, customers continue to

aggressively move away from tape-based backup and recovery processes." —

Robert Amatruda, research director, Data Protection and Recovery at IDC

C o p y r i g h t N o t i c e

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